The three tests

Spanish tax law (IRPF regulations) establishes residency through three independent tests. Fail any one of them and you're tax resident:

Test 1: Physical presence (the 183-day rule)

Spend more than 183 days in Spain during a calendar year and you're tax resident for that year.

What counts:

• Any partial day in Spain counts as a full day

• The calendar year runs January 1 to December 31 (not rolling 12 months)

• Days spent in transit (layovers) generally don't count, but overnight stays do

What doesn't work:

• "Portugal resets" — leaving for a week doesn't restart anything

• Schengen zone counting — Spain tracks Spanish presence, not EU presence

• Being vague about it — the Entry/Exit System (launching April 2026) will make border crossing data automatic

The tell: If you're here most weeks, going to the airport occasionally for a long weekend elsewhere, you're almost certainly over 183 days. Count honestly.

Test 2: Center of economic interests

If your main economic activity or source of income is in Spain, you're tax resident — regardless of days.

What counts:

• Running a business from Spain

• Employment with a Spanish company

• Most of your clients or income sources being in Spain

• Major investments or property income in Spain

What doesn't count:

• Occasionally working remotely while "visiting" Spain

• Investment income from home country if you're genuinely based there

• Short-term consulting projects delivered in Spain

The tell: If you invoice from Spain, manage operations from Spain, or your Spanish income is larger than income from anywhere else, economic center is here.

Test 3: Center of vital interests

If your spouse, minor children, or primary residence is in Spain, you're presumed tax resident.

What counts:

• Spouse or partner living in Spain (legally married or registered pareja de hecho)

• Minor children residing in Spain (even if with ex-partner)

• Your primary home being in Spain (where you return to, not just own)

What doesn't count:

• Adult children living in Spain

• Owning property in Spain that you rent out

• Having friends in Spain

The tell: If your family lives here and you join them regularly, vital interests are here. The tax authority doesn't believe you're really based in Monaco when your kids are in school in Marbella.

Are you accidentally tax resident?

Quick self-assessment:

If you answered Yes to any of these: You're likely Spanish tax resident, regardless of the others.

If you answered Unsure to the first: You probably spent more days here than you think. Check flight records, bank transactions, anything with dates.

What Spanish tax residency means

If you're tax resident in Spain:

1. Worldwide income is taxable in Spain. Not just Spanish income — all income from anywhere. UK rental property, US stock dividends, remote work for an Australian client. All of it.

2. You file Spanish taxes annually. The Declaración de la Renta (income tax return) is due each spring.

3. Foreign assets must be declared. The infamous Modelo 720.

4. Double taxation treaties apply. You shouldn't pay tax twice on the same income, but you need to claim relief correctly.

The Beckham Law (and the €40k threshold)

The Régimen Especial para Trabajadores Desplazados — commonly called the Beckham Law — lets qualifying new residents pay a flat 24% tax on Spanish-source income instead of normal progressive rates (up to 47%).

Who qualifies

• Haven't been Spanish tax resident in the last 5 years

• Moved to Spain due to employment contract OR are a worker under the Digital Nomad Visa

• Don't derive majority of income from Spanish sources (for DNV applicants)

Updated 2023 to include remote workers under DNV.

The benefit

For income up to ~€60,000, rates are similar. The benefit kicks in at higher incomes where you'd otherwise pay 37-47%.

The €40,000 threshold (for DNV applicants)

If you're applying for Beckham Law via the Digital Nomad Visa, you need to demonstrate income/savings of at least €40,000/year equivalent. This is an application threshold, not a tax bracket.

How to apply

Within six months of your work start date or DNV approval:

• File Modelo 149 with Hacienda

• Attach employment contract or DNV approval

• Maintain status for up to 6 years

Once approved, you're taxed only on Spanish-source income (not worldwide) at 24% flat rate.

Modelo 720: The foreign asset declaration

If you're Spanish tax resident and hold assets outside Spain worth over €50,000 in any of three categories, you must file Modelo 720 annually by March 31.

The three categories

1. Bank accounts abroad (€50,000+ aggregate)

2. Securities, investments, shares abroad (€50,000+ aggregate)

3. Real estate abroad (€50,000+ per property)

Each category is evaluated separately. You could have €40,000 in foreign bank accounts and €200,000 in foreign shares — you'd only declare the shares.

The penalties (historically brutal, now moderated)

Spain's original 720 penalties were ruled illegal by the EU Court of Justice in 2022. They've been reduced, but non-filing still carries consequences:

• Fines: Now capped at €200 per data item not declared, with limits

• Late filing: €150 per item, €1,000 minimum

• The assets themselves become subject to income tax if not explained

The practical approach

If you have significant assets abroad and become Spanish tax resident:

1. Know what you hold before the tax year ends

2. Gather documentation (bank statements, brokerage reports)

3. File 720 by March 31 for prior year's holdings

4. Work with a gestor or tax advisor who understands the form

Common audit triggersHacienda isn't randomly auditing expats, but certain patterns draw attention:

Large foreign transfers without explanation: Moving €100,000 from your UK account to your Spanish account looks like undeclared income without supporting documentation.

Modelo 720 discrepancies: Declaring assets one year, not the next, without explanation. Or declaring significantly less than bank records show.

Rental income vs. declared income: Owning multiple Spanish properties while declaring minimal income.

Lifestyle vs. declared income: Driving an €80,000 car on a €20,000 declared salary. The algorithms notice.

Non-filing while registered: Being on the padrón, having a TIE, using Spanish healthcare — but never filing taxes. Eventually this flags.

Spanish-lite

For your tax advisor or gestor meeting:¿Soy residente fiscal en España? — Am I tax resident in Spain?

¿Tengo que presentar el Modelo 720? — Do I need to file the Modelo 720?

Clear questions get clear answers.

Common mistakes

Counting days carelessly: "I was in Portugal for a week" doesn't mean you weren't in Spain for 183+ days. Count actual days.

Ignoring vital interests: Your days could be 150, but if your spouse and kids are here, you're likely resident.

Assuming Beckham Law applies automatically: It doesn't. You must apply within 6 months.

Not filing 720 because "they won't know": They increasingly do. CRS data exchange means foreign banks report to Spain.

Thinking this is optional: Spanish tax residency isn't something you opt into. It's a determination based on facts. Getting it wrong has consequences.

The bottom line

Tax residency in Spain is about more than counting days. It's about where your life is actually centered — economically, personally, physically. If you're living here, working from here, and your family is here, you're Spanish tax resident. Plan accordingly.

The 183-day rule is real, but it's one test of three. Fail any of them and Spain considers you theirs. Most expats who've moved with intention — who've done the TIE, the padrón, the bank account — are tax resident whether they've consciously decided to be or not.

The question isn't whether you're tax resident. It's whether you're filing correctly given that you are.

Onwards — A

Last updated: January 2026

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